If you are planning your retirement from FedEx, start with your hire date. Two employees can work side by side for years and have very different pension and 401(k) rules. Employees hired or rehired on or after January 1, 2020, cannot join the pension plan, and eligible participants made a choice in 2021.
One FedEx employee may still be earning pension credits. Another may have stopped earning them in exchange for a larger 401(k) match. A third may never have been eligible for the pension at all.
Your hire date and the choice you made in 2021 can decide which rules apply to you. Before you pick a retirement date, learn what you have earned, what you could still receive and how those benefits fit into your retirement income.
Details here come from the FedEx retirement website, its plan documents and its filings with the Securities and Exchange Commission. The plan documents control. If this page and your benefit statements differ from those documents, contact FedEx benefits before you decide.
Who This Page Covers
This page covers employees of Federal Express under the corporate retirement programs described on the FedEx retirement site. It does not cover FedEx pilots, who are covered by separate pilot retirement arrangements. It does not cover FedEx Freight, which separated from FedEx effective June 1, 2026, and has its own pension plan.
Hourly package and material handlers at Federal Express who were hired or rehired on or after January 1, 2026, are covered by the Voluntary Retirement Savings Plan. It is a 401(k) with a match of up to 8% of eligible pay. This page does not describe that plan in detail.
Which FedEx Retirement Plan Applies to You?
Your hire date and job history decide whether you can be in the pension plan. FedEx closed its pension plans to employees hired or rehired on or after January 1, 2020. After 2019, moving to an ineligible position or to a FedEx company without a pension plan also ends eligibility. Employees hired earlier may have been in the plan, and eligible participants made a choice in 2021 about how to continue.
- Hired or rehired on or after January 1, 2020. You are not in the pension plan. Your 401(k) match is up to 8%, subject to the plan terms. Hourly package and material handlers hired or rehired on or after January 1, 2026, are in the separate Voluntary Retirement Savings Plan.
- Hired earlier and kept the pension in 2021. Your pension credits continue. The maximum company match in your 401(k) is 3.5%.
- Hired earlier and moved to the larger match in 2021. Your pay credits to the pension stopped after May 31, 2022. Your 401(k) match is up to 8%.
If you are not sure which group you are in, your FedEx benefits records will show it.
Knowing which plan you have is only the first step. The larger question is how your pension, 401(k), retirement date and other assets work together. A choice that looks attractive when you consider one benefit can look different when you consider the whole plan.
What Happens to the Pension You Have Earned?
FedEx capped the older pension formula as of May 31, 2008. Your benefit under that formula was set as of that date.
Pension credits go into a Portable Pension Account for employees hired on or after June 1, 2003, and for active participants of the older plan since June 1, 2008. It shows your benefit as an account balance instead of a formula based on final pay. It is part of a pension plan, so unlike a 401(k), you do not choose its investments.
Your 2021 choice matters here. If you moved to the larger match, pay credits stopped after May 31, 2022, and your balance keeps earning interest credits. If you kept the pension, pay credits continue. Pay credits generally require 1,000 hours of credited service in the plan year that ends May 31. If you are still earning credits and thinking about leaving before May 31, ask whether staying longer would change the credits added to your account. Compare both dates before you decide.
FedEx pension materials show a lump sum and annuity options for the Portable Pension Account. They show annuity options for the older traditional benefit. Payments cannot begin until you are no longer employed by any FedEx company. Your plan documents control which forms apply to you.
Married participants may need spousal consent for some forms of payment. An extra 10% tax can apply to a lump sum taken before age 59 and a half that is not rolled over. An exception to that 10% tax may apply to employer plan distributions if you leave FedEx during or after the calendar year you turn 55. Later withdrawals from an IRA follow different rules.
If you are offered a choice of payments, the pension versus lump sum decision covers how those choices are usually compared. Look at lifetime income, survivor benefits, taxes and flexibility, not only the size of the first payment.
What Should You Know About Your FedEx 401(k)?
Your FedEx 401(k) may hold a large share of your retirement savings, particularly if you were hired in 2020 or later. The FedEx retirement site calls its two main 401(k) plans RSP I and RSP II. RSP I has a maximum company match of 3.5%. RSP II has a match of up to 8%.
In RSP II, FedEx contributes $2 for every $1 you save on the first 2% of your eligible earnings. It contributes $1 for every $1 you save on the next 4%. Saving 6% earns the full 8%, subject to the plan terms.
A match adds money only when you contribute. Money in the 401(k) is invested, so its value can rise or fall. A match is not a promise of any return.
Getting the full match matters while you work. As retirement gets closer, a different question matters more: how will you turn the money you have saved into income without taking more investment risk or paying more tax than you need to?
Will You Have Health Coverage If You Retire Before 65?
If you retire before Medicare eligibility, find out what health coverage will be available and what it will cost. FedEx describes a retiree health reimbursement arrangement, called the Retiree Health Premium Account, for eligible employees. It is a one-time credit that reimburses eligible premiums. It is not health insurance. Its retirement site lists requirements that include a hire date before January 1, 2018, 20 years of continuous service and age 55 or older at retirement. Other conditions may apply.
The FedEx retirement site says retiree health coverage is generally closed to employees hired on or after January 1, 2018. The retirement site also lists a retiree group health plan for retirees under age 65, with open enrollment each November. Qualifying for the reimbursement account does not by itself mean you qualify for the group plan. Ask FedEx which benefits apply to you and what coverage would cost.
Confirm your eligibility with FedEx before you set a retirement date. FedEx says a qualifying Retiree Health Premium Account is lost permanently if it is not activated within one year of your retirement date.
Once you know the likely cost, include it in your retirement income planning.
Five Decisions to Make Before Leaving FedEx
- Confirm which group you are in: your hire date and what you chose in 2021.
- Request a current estimate of your pension benefit if you have one.
- Learn how the pension can be paid and when payments can start.
- Check your retiree health eligibility before you choose a retirement date.
- Decide what to do with your 401(k) account when you leave.
Compare pension payments, 401(k) withdrawals, Social Security, taxes and health costs for each retirement date you are considering.
Your FedEx Benefits Are Only Part of Your Retirement Plan
Knowing which FedEx plan you belong to is the starting point. Deciding what to do with those benefits is a different question. Should you take a pension payment or a lump sum, if both are available? Would working another year change your retirement income? How should you invest your 401(k) once your paycheck stops? And how much can you reasonably spend?
M. Chad Holland, CFA, CFP®, is the investment adviser at Holland Capital Management, an independent registered investment adviser that acts as a fiduciary. He looks at those decisions together. Your FedEx benefits, personal investments, Social Security, taxes and spending needs become one retirement plan.
The aim is to decide based on what your finances can support, instead of treating each benefit as a separate choice. If you live in the Memphis area, the page on a fiduciary financial advisor in Memphis explains how Holland Capital Management works with households there.
The guide to retirement planning covers the wider process, which helps you stay grounded in the plan when a deadline, a market decline or a big choice arrives.
Frequently Asked Questions
Can I Still Join the FedEx Pension Plan?
Not if you were hired or rehired on or after January 1, 2020. FedEx closed its pension plans to employees hired or rehired on or after that date. Employees hired earlier may have been in the plan, and eligible participants made a choice in 2021 about how to continue. Rules for rehires are specific, so ask FedEx about your own record.
What Is the FedEx 401(k) Match?
It is up to 8% in RSP II and a maximum of 3.5% in RSP I. In RSP II, FedEx contributes $2 for every $1 you save on the first 2% of eligible earnings and $1 for every $1 you save on the next 4%. Your hire date and your 2021 choice decide which plan you are in.
What Choice Did FedEx Pension Participants Make in 2021?
They chose between two paths. One kept pension credits with a 401(k) match of up to 3.5%. The other stopped pay credits after May 31, 2022, and moved to a match of up to 8%. Your benefits records show which path you chose.
What Is the Portable Pension Account?
It is the part of the FedEx pension plan that shows your benefit as an account balance. FedEx lists it for employees hired on or after June 1, 2003, and for active participants of the older plan since June 1, 2008. FedEx pension materials show a lump sum and annuity options for it once you are no longer employed by any FedEx company, and the plan sets the forms available to you.
Does FedEx Offer Retiree Health Coverage?
FedEx describes a retiree health reimbursement arrangement, which reimburses eligible premiums and is not health insurance. It also lists a retiree group health plan for retirees under age 65. The reimbursement arrangement lists requirements that include a hire date before January 1, 2018, 20 years of continuous service and age 55 or older. Other conditions may apply. FedEx says the account is lost permanently if it is not activated within one year of retirement. Confirm what applies to you with FedEx.
What Happens to My FedEx 401(k) When I Leave?
You will have choices, and the plan rules set which ones are open to you. Common choices include leaving the money in the plan if it allows that, moving it to an IRA or to a new employer plan, or taking cash. A 401(k) rollover may keep the money tax-deferred, while cash withdrawals may be taxed and may carry a penalty. Before you decide, compare investment choices, fees, withdrawal rules and creditor protections, and note that Roth balances are treated differently.
Do FedEx Pilots, FedEx Freight and Newly Hired Handlers Follow the Same Plans?
No. Pilots have separate retirement arrangements. FedEx Freight separated from FedEx effective June 1, 2026, and it has its own pension plan. Hourly package and material handlers at Federal Express hired or rehired on or after January 1, 2026, are covered by the Voluntary Retirement Savings Plan. Check the plan documents that apply to you.
Where Can I Read About Other Employers’ Retirement Benefits?
Other large employers are covered in the guide to employer and government retirement planning. Questions are often similar: which plan you are in, what the pension pays and how health coverage works before Medicare.
Holland Capital Management is an independent advisory firm. We are not affiliated with FedEx and do not administer its pension or retirement plans. If you are looking for information about your benefit, please contact FedEx benefits directly.
